The Aussie market is looking at a nasty 80 point plus slide this morning after oil prices resumed their slide overnight, sending markets across Asia, Europe and the US sharply lower.
Only the Chinese market rose among the major markets yesterday – up more than 2%, while our market lost 50 points, or 1%. This morning the overnight ASX 200 futures market was pointing to an 81 point slump at the opening of trading at 10 am.
The Aussie dollar traded over 70 US cents for most of the session as the boost from the Bank of Japan changes last Friday ran out of puff.
On Wall Street, the Dow lost 1.8%, the S&P 500 shed 1.9% and the Nasdaq fell 2.2%.
The driver was the slump in oil prices Global benchmark Brent crude fell more than 3% to $US33.12 a barrel, and West Texas Intermediate oil dropped 5.4% to $US29.90 a barrel in early Asian trading this morning after settling above $US30 a barrel in US trading.
That is going to have a big negative impact on local shares and not even another rise in the iron ore price (up nearly 2% to $US43.84 a tonne) will offset the impact of the oil prices slide.
Gold traded roughly steady on $US1,128 an ounce, and up $U2 in early Asian trading. Copper was steady around $US2.055 a pound on Comex in New York.
European shares finished lower overnight in the biggest one day drop for two weeks, thanks to the renewed selloff in oil prices. The Stoxx Europe 600 fell 2.1% to close at 334.59 overnight. The weaker commodity prices hit the London’s FTSE 100 and the index fell 2.3% to 5,922.01. In Paris, the CAC 40 index slid 2.5% to 4,283.99, while Germany’s DAX 30 lost 1.8% to 9,581.04. The Italian and Spanish were down around 3%.
In Asia, all markets bar China fell yesterday.
China shares climbed Tuesday after the country’s central bank injected more liquidity (over $US15 billion) into the financial system ahead of next week’s New Year holidays. The Shanghai Composite Index closed up 2.3% at 2,749.57.
Elsewhere, the Nikkei Stock Average slipped 0.6% in Tokyo, while Australia’s ASX 200 lost 1% and Hong Kong’s Hang Seng Index down 0.8%. South Korea’s Kospi fell 1%.
